CONCEPT OF INTERNATIONAL MARKETING LOGISTICS

Word, ‟Logistics‟ is derived from French word „loger‟, which means art of war pertaining to
movement and supply of armies. Basically a military concept, it is now commonly applied to
marketing management. Fighting a war requires the setting of an objective, and to achieve this
objective meticulous planning is needed so that the tro ops are properly deployed and the supply
line consisting, weapons, food, medical assistance, etc. is maintained. Similarly, the plan should be
each that there is a minimum loss of men and material while, at the same time, it is capable of being
altered if the need arises. As in the case of fighting a war in the battle-field, the marketing managers
also need a suitable logistics plan that is capable of satisfying the company objective of meeting
profitably the demand of the targeted customers. From the point of view of management, marketing
logistics or physical distribution has been described as „planning, implementing and controlling the
process of physical flows of materials and final products from the point of origin to the point of use
in order to meet customer‟s needs at a profit.

As a concept it means the art of managing the flow of raw materials and finished goods from the
source of supply to their users. In other words, primarily it involves efficient management of goods
from the end of product line to the consumers and in some cases, include the movement of raw
materials from the source of supply to the beginning of the production line. These activities include
transportation warehousing, inventory control, order processing and information monitoring. These
activities are considered primary to the effective management of logistics because they either
contribute most to the total cost of logistics or they are essential to effective completion of the
logistics task. However, the firms must carry out these activities as essential part of providing
customer with the goods and services they desire.

SIGNIFIGANCE OF MARKETING LOGISTICS

The important of a logistics system lies in the fact that it leads to ultimate consummation of the sales
contract. The buyer is not interested in the promises of the seller that he can supply goods at
competitive price but that he actually does so. Delivery according to the contract is essential to
fulfilling the commercial and legal requirements. In the event of failure to comply with the stipulated
supply of period, the seller may not only get his sale amount back, but may also be legally penalized,
if the sales contract so specifies. There is no doubt that better delivery schedule is a good
promotional strategy when buyers are reluctant to invest in warehousing and keeping higher level of
inventories. Similarly, better and/or timely delivery helps in getting repeat orders through creation
of goodwill for the supplier. Thus, as effective logistics system contributes immensely to the
achievements of the business and marketing objectives of a firm. It creates time and place utilities in
the products and thereby helps in maximizing the value satisfaction to consumers. By ensuring quick
deliveries in minimum time and cost, it relieves the customers of holding excess inventories. It also
brings down the cost of carrying inventory, material handling, transportation and other related
activities of distribution. In nutshell, an efficient system of physical distribution/logistics has a great
potential for improving customer service and reducing costs.

Logistics has gained importance due to the following trends:

Raise in transportation cost.

 Production efficiency is reaching a peak

 Fundamental change in inventory philosophy

 Product line proliferated

 Computer technology

 Increased use or computers

 Growth of several new, large retail chains or mass merchandise with large demands & very
sophisticated logistics services bypass the traditional channel of distribution.

 Reduction in economic regulation

 Growing power of retailers

 Globalization

As a result of these developments, the decision maker has a number of choices to work out the most
ideal marketing logistics system. Essentially, this system implies that people at all levels of
management think and act in terms of integrated capabilities and adoption of a total approach to
achieve pre-determined logistics objectives.